Ag Businesses See Slight Growth, If Any

by Kate Knable  on Monday, May. 21, 2012 12:00 am  

The year 2011 looked better than 2010 for half of Arkansas' largest private agricultural businesses, but the revenue increases that most of those companies experienced were small.

(Click here for a list of poultry, agricultural and timber companies among the largest private companies in Arkansas.)

For example, Anthony Timberlands Inc. of Bearden saw 2011 revenue of $144.3 million, a boost of about 2 percent over last year.

"The revenue increase was a result of our hardwood mill operating for an entire year. In 2010, we had significant weather-related downtime," Steve Anthony, company president, told Arkansas Business in an email. "Profits are non-existent."

2010 was better for lumber production because demand had grown slightly and supply was down, Anthony said. In 2011, however, companies observed what appeared to be an uptick in demand, and they increased production, overwhelming the market.

"A lot of producers increased capacity, ... so prices pretty much crashed for the entire year," Anthony said. "It's almost a yo-yo effect. When things get bad, people curtail and reduce their capacity. Producers rebound ....  [and] if the market's not advancing, then it just smothers the market from a price standpoint."

Another company, Producers Rice Mill Inc. in Stuttgart, had 2011 revenue of $500 million, an increase of nearly 4 percent year over year. Producers Rice Mill's profits are directly dependent on Arkansas' rice crops, said Keith Glover, president and CEO.

Arkansas had about 1.8 million acres planted in rice in 2010, with record yields but a low-quality crop due to bad weather, Glover said. In 2011, farmers planted 1.2 million acres of rice in the state.

"As an industry, we've had a slower year, with less activity," Glover said. "Prices have improved. The smaller crop was a big positive for the price."

This year should produce an even smaller crop due to even fewer acres being planted, but there was better weather during the planting season than in 2011, so 2012 could still be a better year, Glover said.

Poultry producer Mountaire Corp. of Little Rock, which remains the largest private agribusiness headquartered in Arkansas, saw an increase in revenue of nearly 7 percent in 2011, with $1.4 billion.

The $1.3 billion in revenue experienced by poultry-processing company Simmons Foods Inc. of Siloam Springs in 2011 was an increase of almost 25 percent.



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